The Government of Armenia (GOA) has a progressive policy for supporting development of water and wastewater services to the country's 3.1million population. Armenia was originally faced with increasing demand, deteriorating assets and dilapidated infrastructure, which resulted in a steadily decreasing and costly provision of service. Huge investment efforts have been made during the Soviet period in order to provide modern drinking water and wastewater services to all domestic and professional, urban and rural users. For many years after the collapse of the Soviet economy, most of the water supply and sanitation systems in Armenia were in serious state of disrepair. Despite an abundance of water in the country, for almost all Armenians, water was available for only a few hours a day. Over the past decade GoA has strived to improve access, reliability and quality of the drinking water and its infrastructure with increased use of public-private partnerships (PPPs), which have changed the way it manages the sector and brought about improvements in quality and service to customers. Since GOA's decision on how to proceed depends not only on Armenian Water and Sewerage Company (AWSC's) setup, but also on a broader sector-wide strategic approach to water supply, this policy note (Note) reviews the existing situation for integrated water management in Armenia, with the objectives of: a) providing guidance on improving levels of service, b) ensuring long term sustainability of the sector, and c) maintaining affordability of services to users towards cost recovery of operations. The note analyses current sector performance and issues involved in establishing a practical water supply service provision. The recommendations are focused on providing specific sector policy options for effective management of water services to meet GOA's development objectives.